Limitation is a hard outer boundary on the department's power, not a procedural nicety — a notice issued after the period expires is issued without jurisdiction and everything built on it falls. For reassessment, section 149 as substituted by the Finance (No. 2) Act 2024 with effect from 1 September 2024 bars a section 148 notice after three years and three months from the end of the relevant assessment year, extending to five years and three months only where the officer holds books, documents or evidence showing escaped income of fifty lakh rupees or more.
Every coercive power in the Act is time-bound. There is a period within which a notice may be issued, and a period within which the resulting assessment must be completed. The two are separate, and both can be missed.
For reassessment, section 149 as substituted by Act No. 15 of 2024 with effect from 1 September 2024 provides that no notice under section 148 shall be issued if three years and three months have elapsed from the end of the relevant assessment year, unless the case falls in the extended limb. Under that limb the notice may go up to five years and three months from the end of the relevant assessment year, but only where the Assessing Officer has in his possession books of account or other documents or evidence relating to an asset, expenditure, transaction or entries which show that the income chargeable to tax which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more. Section 149(2) applies corresponding limits to a notice under section 148A, measured as three years and five years.
The fifty lakh threshold is not a formality. It has to be supported by material in the officer's possession at the time, of the kind the section describes, and it has to relate to the assessment year in question. An estimate, a suspicion, or an aggregate across years does not open the longer window.
Other limitation provisions work the same way. Section 201(3) bars an order deeming a person an assessee in default for failure to deduct tax after the expiry of six years from the end of the financial year in which the payment was made or credit given. Section 153 sets outer limits for completing assessments and reassessments.
Why limitation is jurisdictional rather than procedural is the point that decides cases. A procedural defect can be cured or waived; a jurisdictional one cannot. The Jharkhand High Court in Sevensea Vincom Private Limited v. Principal CIT held that where a section 148 notice was issued beyond the period prescribed by section 149, the very initiation of the reassessment proceeding was wholly without jurisdiction, applying the principle that if the foundation of a proceeding is illegal, all consequential proceedings and orders are bad in law. There the notice was issued for assessment year 2016-17 after the three-year period had run and the escaped income was below fifty lakh rupees, so the extended window was unavailable.
Because limitation attaches to the issue of the notice, the date of issue has to be established, not assumed. The Delhi High Court in Suman Jeet Agarwal v. ITO held that "issued" means the date of actual despatch or transmission — not the date the notice was generated or digitally signed — with different answers for email, portal upload and speed post. A notice dated 31 March but digitally signed and transmitted in April is issued in April.
One complication overhangs older reassessments. In Union of India v. Rajeev Bansal the Supreme Court dealt with the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, holding that its overriding provisions continue to apply to the Income-tax Act after 1 April 2021 where an action or proceeding fell for completion between 20 March 2020 and 31 March 2021, and that it extends time limits without touching substantive requirements such as the sanction under section 151. So for the relevant pandemic-window years, the arithmetic of limitation runs through that decision.
Finally, note which Act you are under. The Income-tax Act, 2025 came into force on 1 April 2026, and its section 282 carries the time limits for notices that section 149 of the 1961 Act carried. But section 536(2)(c) of the new Act preserves the repealed Act for proceedings pending on 1 April 2026 and for proceedings initiated afterwards in respect of any tax year beginning before 1 April 2026 — so for the years most notices concern, section 149 still governs.
A limitation point, if good, ends the proceeding without any argument on the merits, and it cannot be answered by saying the officer had good reasons or that you participated. It also cannot be waived by your conduct, so it survives even if you took part in the assessment. Establishing it turns on the date of issue, which means you need the despatch record rather than the date printed on the notice.
The only thing behind my reopening notice is the Valuation Officer's report. Is that enough?
My return was only processed under 143(1). Does that stop the department reopening it later?
Has the Supreme Court settled whether the s.144C nine-month DRP process runs over and above the s.153 limitation?
The order under section 148A(d) rejects everything I said and the section 148 notice has followed. Can I take it straight to the High Court?
I made unexplained investments after the close of my accounting year. Which year can the officer tax them in, and can he reopen an earlier year to do it?
My land was notified and an award was made under the Land Acquisition Act, but I thought the award was too low, negotiated a higher figure and executed a sale deed. The Assessing Officer now says that was a voluntary sale and denies s.10(37). Is he right?
We sell prepaid SIMs and vouchers to distributors below list price. Is that margin commission under 194H?
How much am I actually required to disclose — and can they reopen because the officer drew the wrong conclusion?
Every page in this library links to what it was written from, so you can check it rather than take our word for it.
